BBC, British Library empires expand under Tory 'growth plan'

Every time Conservatives come to power, they promise to invigorate fusty old state institutions. They vow to set them free of the mediocre, the time-markers and the empire-builders they've acquired over the years, and renew them with competition and fresh thinking.

But by the time the Tories leave office, these gravy trains often seem to have mysteriously acquired a few extra carriages. There are two examples - which have been completely overlooked - in yesterday's "Plan for Growth", launched to coincide with the budget.

Both institutions benefit from new roles, and new opportunities for rent-seeking… and empire-building. The 130-page growth program is billed as a set of "radical reforms in areas that act as barriers to enterprise" - but if we are to take it at its word, then the two biggest beneficiaries are quite surprising. Hats off then to the British Library and the BBC - winners of this week's award for silent but deadly lobbying.

The BBC's commercial department, Worldwide, has been formally anointed with a greatly expanded remit. It currently sells on BBC programs, formats, DVDs, magazines and merchandise on the global market, grossing about £1bn a year. All well and good - that's £1bn more for the BBC to spend on programs, and £1bn less for the licence fee payer. Until you spot that Worldwide's profit margins are around 15 per cent.

Profit margins on completed programs should be much higher - since the program has already been paid for. For formats, these should be higher still, since BBCW is simply licensing a concept. And for Dalek toys it should be around 25 to 35 per cent.

The 15 per cent return makes BBC Worldwide one of the most inefficient and incompetent commercial organisations going. Yet the coalition has rewarded failure with an expanded role:

"The Government recognises BBC Worldwide’s contribution to UK creative exports," it notes [p104], "and would welcome exploration by the BBC of how BBC Worldwide may act as a source of finance and distribution expertise for UK D&CI [Digital and Creative Industries] firms with global ambitions."

Expertise in… what, exactly? Executives at rival creative and licensing companies who turned in figures as bad as BBC Worldwide's would be pushed through the Exit door, without a golden parachute. Yet this will be warmly received at Wood Lane HQ.

In 2008, Worldwide had its wings clipped by the BBC Trust, which wondered why it was going around buying up other media companies. The BBC had acquired Lonely Planet from a £350m acquisition kitty. In 2009 the Trust put a stop on acquisitions over £30m. Now it's free to explore becoming a fully blown media consultancy (ker-ching) and er... bank?

The other beneficiary is the regal Dame Brindley of the British Library, who has lobbied for new powers to grab copyrighted works. A year ago, Parliament rejected a change in orphan works legislation in the horse-trading over Digital Economy Act, with photographers and others successfully convincing MPs that Clause 43 was badly written and unfair. Now it's back.

The British Library says the current law prevents it from digitising work where the author isn't identified (the metadata is missing, or the author has moved house). Photographers agree - and some have proposed a strict exemption for cultural use, and a national archive which would allow people to see them.

It's the unintended consequences they fear - something the empire-building "Big Culture" institutions have done little to dispel. Orphan works aren't just photos of great-uncle Albert or old movie loops - almost every graphic, illustration or photo on the web is an orphan, since it's stripped of identifying metadata. This makes it a live issue.

The British Library has had some wacky ideas in recent times - such as committing taxpayer funds to archiving every bit of rubbish ever committed to the interwebs - every tweet and LOL. These stunts shouldn't obscure its more serious expansion into becoming a major publisher itself.

The BL wanted to archive national newspapers, but couldn't get the permission for the job - so it went ahead and did it anyway, much as Google simply went ahead and scanned books without the authors' permission. Yet as The Times has shown, by digitising its historic collection, no taxpayer's money need be committed to this - it's something the private sector can do if it thinks it can recoup the cost.

There are many ways of tackling the orphans issue without killing off our native visual artists - illustrators, graphic designers and photographers - who scrape a living from their work through direct licensing. Stop43's is one example, with the national archive being an eBay-style trading system for image seekers and users. Identification could be "crowdsourced", they suggest.

The commercial incentive to build a better mousetrap comes into play here - if an image can't be found, users are pointed to similar works, or Creative Commons-tagged works. Technology is quite getting quite good at this. But Big Culture is unlikely to want to create such innovations. Its sense of entitlement needs to be put into perspective.

The British Library is also likely to run into united opposition from the creative industries. A rare unanimous joint statement from the umbrella group the British Copyright Council added six conditions to the non-commercial use of orphans licensing. You can find them on p47 of the BCC's Hargreaves submission (pdf).

The conditions firmly uphold the creator's moral rights, and calls for sanctions on organisations that routinely strip ID information from photos: major media companies which call on the public to send in their shots, and then strip away all the identifying metadata as the photos are uploaded. For example, the BBC.

No doubt we'd all make the claims that Dame Brindley makes if we were in her shoes. The first duty of a bureaucrat is the continuity of the institution. Brindley argues the British Library is uniquely competent and qualified here, that only the British Library can undertake work for a national archive.

Yet this is demonstrably untrue, as we have seen, and shows an inflated sense of entitlement. There can be very little justification to destroy several small creative markets, simply to expand a state monopoly.

You'd think a Conservative would spot the problem, here. ®

Bootnote

The curious thing is that Hargreaves "Independent Review into IP and Growth" hasn't even reported, he's due to in April, and he hasn't uttered a clue about what it will contain. But the Treasury already knows what he's going to say.